Strategies for Growth

With the vast majority of kitchen and bath dealers reporting strong sales in 2005, planning for 2006 becomes something of a challenge. They must ask themselves, is it best to take the “don’t fix what’s not broken” strategy, or continue to make changes to try to enjoy even bigger success in 2006?

Most dealers interviewed by Kitchen & Bath Design News seem to be taking something of a split approach: continuing along the lines of what worked so well for 2005, while staying open to new profit opportunities.

Planned growth strategies vary widely among dealers and designers, based on location, size and client preferences, yet most revolve around carefully defining target clientele, rethinking dated marketing strategies, and pumping up displays, product offerings and staff.

Target Clientele

For the majority of kitchen and bath dealers and designers interviewed by KBDN, a big part of their business strategy for the coming year involves refining their target clientele.

However, this can mean many things: Some dealerships see broadening their client base as the best way to grow sales, while others see becoming more niche-specific as the best route to growth.

According to Jill McGlaughlin, president of Classic Kitchens, Inc. in Harrisonburg, VA, broadening her firm’s horizons is the best way to ensure future growth. As she notes, “We have seen the need to be diverse. We are trying to capture both new construction and the remodeling market. Sure, the building boom is great, and it’s been [great for our business], but we know that we also need to have that remodeling aspect in our scope.”

Notes Bob Harvey, owner/president of Canyon Cabinetry and Design, Inc. in Tucson, AZ, “[Our target clientele] has really changed, and not necessarily because we have steered the boat, so to speak. The market itself here has driven things in a direction that we have needed to stay with and then become very well versed at.”

For one thing, his area is getting “more people who are transplants or coming in from other areas rather than the Southwest.” This means not just catering to the Southwest design influences that were prevalent in Tucson in years past, but also broadening design offerings for these transplants.

He further states, “Tucson is an extremely hot market right now. This is a resort area, and there is a lot of new construction and a lot of remodeling. As a result, [we not only have more jobs], but our jobs have grown in price range. People here are becoming more sophisticated buyers who demand a higher quality product and are asking for more custom finishing touches.”

In addition, he points out, “The big box stores still carry the DIY market, [and these stores] may not tackle [the more upscale] gourmet endeavors; [their clients generally don’t] go for those higher-end product lines. So the home centers [in effect] change the type of people who walk into our showroom.

Over at Templer Interiors in San Francisco, CA, owner Susan Templer has been targeting a more upscale clientele for 2006 by updating her Web site. She explains, “I currently have a Web site that has been bringing in more business all the time, so I am in the process of both handling a lot of new work and trying to incorporate a whole new look for the site. It is about three years old right now and I think if it got a more modern, slick look with some of the flash features, that would help to bring in a higher-end client. I haven’t done anything for 2005 on this, but for 2006, I hope that I will be able to [move to a higher-bracket clientele], in part through the updated Web site.”

Templer is also planning to be a bit more selective with clients, and with the type of work she takes on in ’06. She explains, “I really look at what has been coming in – I take a good hard look at the leads from my Web site and referrals from contractors, and then I choose what jobs I am going to take and what my focus will be, naturally looking toward taking on more of the bigger and higher-end jobs.”

She adds, “In San Francisco, there isn’t a lot of new construction, but I did do my first consulting job including kitchen and bath design on a new construction. I took that one on intentionally. I consulted from the ground up, [and that’s an area I’d like to get move involved with in the future].”

By contrast, Deborah Krasner, owner and founder of Kitchens for Cooks in Putney, VT, will work with clients from any price point, as long as they share one specific trait: a love of cooking. She notes, “I have clients for whom price is no object, and I have other clients for whom price is a pressing concern and I am happy to work at both ends of the market. My concern is really to support people who want to cook. Part of my vision for myself is to help people who want to cook for themselves, their families and their friends.”

She adds, “I think the kitchen needs to be not only a functional place to cook in, but it also has to support the emotional life of the people who use it. For that reason, I developed a whole theory of kitchen design based on zones, so that more than one person can cook in a kitchen at a time. I can be flexible design-wise, but with every case, I try to customize kitchens for the people who will be using them.”

Marketing Efforts

For McGlaughlin, marketing is something that should take a multi-faceted approach, and her goal for the coming year is to use her marketing efforts to “renew our image in the community.” Her firm’s current efforts include “a lot of radio advertising, and we are having an open house this fall in celebration of National Kitchen & Bath Month. We are also promoting within our showroom through our displays, and we believe that keeping a fresh approach will give our customers something to be excited about.”

Harvey is looking to put in a demonstration kitchen in 2006 in which he can hold special events, classes and wine and cheese parties geared toward bringing people into the showroom.

For some, such as Templer, marketing efforts have moved away from the traditional formats such as Yellow Pages ads and more toward an enhanced Web site presence. She says, “For next year, I’ve cut my Yellow Pages ad down to just a single line with my phone number. I’m just not getting business off the Yellow Pages ad anymore. On the other hand, I’m getting more and more business from my Web site, so that’s where I’m focusing going forward.”

Krasner, on the other hand, does very little formal marketing, relying primarily on word-of-mouth from people who have read her books and articles, as well as referrals from architects, builders and former clients.

She states, “I don’t sell myself. I don’t advertise. I don’t have a showroom.” However, what she does do is show, rather than tell. She explains, “I will invite people to come to my kitchen – which is very much a demonstration kitchen for the type of approach that I take. I invite them to use it, look in every drawer and ask lots of questions so that they can see what I do.” This, she finds, is more effective for her firm than traditional marketing avenues.

Charitable efforts also were cited by many as a way to enhance a firm’s reputation while giving something back to the community. For instance, Harvey notes, “We have always been active with the Boy Scouts, and we’ve also been very involved in helping the victims of Hurricane Katrina. We also try to stay active with the police helping kids, and I’ve even done the Muscular Dystrophy drive where you are put ‘in jail’ and you have to call everyone you can think of to give donations since it will cost a couple of grand to get out of jail. And the Boys and Girls Club here has a silent auction and we are also a sponsor for that.”

Adds McGlaughlin, “We typically work with Habitat for Humanity, usually giving a kitchen away, or a home.”

Products

As for product offerings, while some dealers and designers are actively adding to their product lines, others say they are content with their current offerings – particularly if they expanded their offerings this year. Those dealers and designers are focusing more on updating displays and offering more live displays to spur on sales.

McGlaughlin notes that she changed cabinet lines for this year and redid her showroom with four or five displays. So, she says, “For 2006, I expect it will be more wait and see.”

Templer is a big fan of live displays, and because her showroom is part of her house, she is able to have all working displays. She says, “I’ve got a Neil Kelly display in my home office and it is really nice and functional. What I go for with displays is I try to show as many door styles and as many features of the cabinets in one or two items as I can. One of the things I specialize in is custom cabinets through cabinet companies. For instance, one display is a tall cabinet that has two doors at the bottom and it has two little drawers and a row of little cubby drawers. Above that it has one of the fold-down drawers and at the top of that it has four boxes sort of partitioned off.

“I have combined five different elements into one tall cabinet and the cabinet company built that as one unit. It is an interesting looking piece, plus I can show all of these different things that the cabinet company offers in one efficient, functional cabinet display.

“Because I work out of my house, I have a home office and home studio rather than a traditional retail showroom. So I have my kitchen, which has all of the Hafele stuff, and I sell cabinets out of there. I have four additional free-standing cabinets throughout the office and the studio where I can show all of the different door styles. I also have a door display in my studio that has all of the sample doors, with all of the hardware boards up on the wall.”

Staffing Plans

While some designers plan to keep the status quo when it comes to staffing, others are gearing up for the new year by hiring additional help to assist with the growing number of jobs.

Templer, who added to her staff in 2005, is currently working on learning how to maximize profitability from the larger staff. She explains, “I am an independent designer and I have two junior designers who work for me. That is a new thing for us in 2005. I had been working strictly by myself, and I was the only designer.

“Now, I have taken two of my design assistants and turned them into junior designers and am referring jobs to them. So, with some of the smaller projects, I will ask the potential clients how they feel about working with one of my junior designers.

“That has worked really well because I have two projects where there are two bathrooms each, and the clients are all working with my other designers with me overseeing and consulting. The way I present it to potential clients is that they are hiring two designers, essentially, because nothing happens without me overseeing it. That has really increased my business, because I am paying the junior designers a percentage and I am overseeing it, so I don’t have to spend as much time on each project [yet they are still bringing in profits]. My junior designers are learning and making more money, and so am I.”

However, while added staff can help with a growing work load, new staffers can add their own unique challenges.

For instance, Harvey is seeing strong growth that calls for definite expansion, but his plans for expansion come with a caveat: “Although we are expanding, our sales approach has always been to emphasize customer service. Some of the things that can get lost [during a growth period] – especially in a town that is growing beyond its capacity – become an unfortunate by-product of that growth, and that’s something [we want to avoid].

He adds, “We’re struggling desperately to build a better administrative system that we’ve been working on putting in place. As the machine grows, so do the moving parts. To maintain a systematic approach by everyone that keeps our service level the same…that is important to us.” It’s also a real potential danger for growing firms that don’t keep a close eye on maintaining their quality standards.

Harvey notes that his firm is increasingly relying on subcontractors and vendors to act as partners, so the firm can offer more turnkey services. He explains, “Our primary focus and emphasis is to create an organized design firm that can put these people in and out of their remodeling agony as quickly, efficiently and accurately as possible. “

Other Factors

Of course, kitchen and bath dealers and designers are also looking toward other areas to enhance their growth in the new year, from technology to continued education.

For instance, Templer is going to AutoCad because she believes it will improve her firm’s efficiency. “I had previously been doing all hand drawings,” she notes, “but this will make more sense for us, particularly because I do a lot of work with architects, where they design the whole house and they just call me in to do the kitchen and bathroom. So [with AutoCad], it’s a lot easier to design in their language and then I can just e-mail them the finals.”

McGlaughlin notes that she is a member of the BKBG buying group, and she also sends her salespeople to training events and her designers to NKBA courses to further their education. “The stronger our staff is, the stronger our firm is,” she notes.

Krasner focuses on creating “unconventional kitchens” to differentiate herself from her competitors. For example, she says, “Almost every kitchen that I design has European toe-kick standards. The reason for that is that the toe kick can then be made into recessed drawers, which adds a tremendous amount of functional storage space around the base of a room.”

This is also the reason she doesn’t much care for computer-aided design programs. As she sees it, “All of the CAD programs – unless you really customize them – don’t do that.”

Templer is spending more time qualifying potential clients as a result of an influx of business that requires her to select her clients more carefully.

Harvey has done more with online buying, and also keeps a map of Tucson handy, with a numerical notation of where someone in the industry is located. These are then color coded to reflect the type of business the firms do and how they fit into Tucson’s market. Direct competitors are noted in the same color as his own firm, and this not only helped determine the right site for the firm’s second location, it also helps them to stay abreast of all the competition.

In the end, though, whatever strategies kitchen and bath dealers pursue to ensure future growth, the bottom line is simple: “The market may drive us, but the bottom line is that what will keep us alive and growing is that everyone’s impression of us and experience with us is a good one, and that our clients leave happy,” Harvey concludes.

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